Can North America establish a rare earths supply chain without China? And why is copper looking interesting?
The rare earths market is dominated by China, but Byron King, who writes Whiskey & Gunpowder at Agora Financial, believes North America has the ability to develop its own supply chain.
“The good news is you can do that with zero China input,” he said. “The bad news is that it’s going to cost you some money … that’s the only way it’s going to happen.”
The US Department of Defense (DOD) was in the news last month for backing out of a plan to fund two rare earths processing facilities in the country. King said it seems to have been one project’s connection to China that abruptly halted progress.
“When we say that the DOD has backed off of its earlier program to develop rare earths, I think what they realized was a big element of that program to develop rare earths had a Chinese angle to it,” he said.
China produces the lion’s share of the world’s rare earths by far, and America’s dependence on supply from the Asian nation came into focus about a year ago when trade tensions were raging.
King emphasized that while he believes there are people and companies in the US and Canada with the ability to set up a North American rare earths supply chain — including Medallion Resources (TSXV:MDL,OTCQX:MLLOF), which he described as “the most advanced company with the best ideas” — he’s not sure government decision makers will allocate funds to help them address the problem.
“The answer is absolutely yes, we could do it if there’s political will and they back it up with some money … you will have the industry that you need and you’ll have the security of supply that you absolutely require,” commented King.
Aside from rare earths, King touched on copper, which he is “really hot on” because of its rising uses.
“There’s going to be a lot more copper in cars, there’s going to be a lot more copper in — just in other electrical things as the world builds out. Whether it’s renewable energy, all those sorts of things. And it’s not just a US/Canada thing, it’s a global thing,” he explained. There’s also the potential for copper’s applications to expand due to its antimicrobial properties.
Watch the video above for more from King on rare earths and copper, or click here for part one of the interview, which covers the gold price. You can also click here for part two, which looks at gold stocks.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Medallion Resources is a client of the Investing News Network. This article is not paid-for content.
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